Wednesday, March 7, 2012

About Returning Those Santa Clara Rights to the A's

The A's press release today regarding territorial rights is really more than meets the eye. It was not just a refutation of Bill Madden's piece, it was a strategic piece of communication. This passage, in particular, resonated with me:

The granting of Santa Clara to the Giants was by agreement with the A’s late owner Walter Haas, who approved the request without compensation. The Giants were unable to obtain a vote to move and the return of Santa Clara to its original status was not formally accomplished.

Apparently, the A's are arguing that Haas' grant of territorial rights -- one in which the terms are anyone's guess to this day -- was conditional on the Giants actually going to Santa Clara County. You could interpret this statement by the A's as saying that its time for MLB to restore the original T-rights. This is a slightly different tack than the oft-repeated (even in this press release) concept that the A's and Giants should split the entire market (like the Mets/Yankees, Angels/Dodgers and Cubs/White Sox) as opposed to the current county-by-county apportionment.

A question that begs to be asked, is why has Santa Clara County not been "formally" moved back to the A's? The Giants argument is that their team's current ownership bought the ballpark and invested in AT&T Park partially because the team held these rights. Per former managing general partner Peter Magowan in a December front-page San Francisco Chroniclearticle:

Investors would not have taken the risk if there was belief that our chief competitor could create a shiny new stadium right in the heart of our fan base.

The "heart of our fan base" comment is interesting. According to the Giants corporate sponsorship demographic information 21.4 percent of their fans come from Santa Clara County -- a greater percentage than any other county, including San Francisco.

The Giants have a huge lease and a still significant payroll, although down from last year. Bear this in mind when considering from the same December 2011 Chronicle piece linked to above the following:

There is thought that, despite the Giants' obligations on their debt service, a majority of big-league owners might be tired of paying the A's hefty revenue-sharing checks - more than $30 million last season. A new stadium in the 10th-largest city in the country probably would put money into the revenue-sharing pot. The Giants argue that they might then be taking out of the kitty rather than contributing. San Francisco must draw 3.3 million to operate at its current level, according to club officials. The Giants sold out every game last season and drew 3.387 million.

21.4 percent of 3.387 million is 724,818. Take that number away from the Giants gate last year -- which is abnormally high based on historical results as they basked in World Series glow -- and it drops the gate to about 2.7 million. One would assume in the "honeymoon" period with a stadium in San Jose the A's, dead last in attendance last season, would draw at least that many additional fans. (The counter-argument here is that more East Bay fans would go to Giants games.) Would a successful A's team in San Jose make the Giants unprofitable?

The Giants are desperate to keep the A's out of the South Bay. Defensive moves such as buying a controlling stake in the minor league San Jose Giants, peppering the area with Giants Dugout merchandise stores and backing the flim-flam astroturf group "Stand for San Jose" all throw up roadblocks for the A's. It's hard to know if the Giants claims of profitability are true. Equally hard to know is if the contract for purchasing the team or the team's long-term sponsorship deals explicitly mention the South Bay.

Also -- It is hard to quantify if the A's or Giants are more popular in the South Bay. (The Giants seem more popular right now everywhere as they recently won the World Series.) This article, while dated, gave an interesting historical perspective on the G-Men's roots in the area.